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Kandagiri Spinning Mills Ltd.

BSE: 521242 Sector: Industrials
NSE: KANDAGIRI ISIN Code: INE292D01019
BSE LIVE 15:21 | 20 Sep 40.85 0.10
(0.25%)
OPEN

41.00

HIGH

41.00

LOW

38.05

NSE 00:00 | 23 Aug Stock Is Not Traded.
OPEN 41.00
PREVIOUS CLOSE 40.75
VOLUME 150
52-Week high 65.50
52-Week low 36.85
P/E
Mkt Cap.(Rs cr) 16
Buy Price 40.00
Buy Qty 1.00
Sell Price 40.85
Sell Qty 28.00
OPEN 41.00
CLOSE 40.75
VOLUME 150
52-Week high 65.50
52-Week low 36.85
P/E
Mkt Cap.(Rs cr) 16
Buy Price 40.00
Buy Qty 1.00
Sell Price 40.85
Sell Qty 28.00

Kandagiri Spinning Mills Ltd. (KANDAGIRI) - Auditors Report

Company auditors report

To the Members of Kandagiri Spinning Mills Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of KandagiriSpinning Mills Limited (the Company) which comprise the Balance Sheet as at March 312017 the Statement of Profit and Loss and the Cash Flow Statement for the year then endedand a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act) with respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairs ofthe Company profit or loss and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under and the Order under section143 (11) of the Act.

4. We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the standalone financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

6. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

7. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

8. As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act.

e. On the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 from being appointed as a director in terms of Section 164(2) of theAct.

f. With respect of the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure A . Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company's internal financial controls over financialreporting.

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(i.) The Company has in accordance with the generally accepted accounting practicedisclosed the impact of pending litigations on its financial position in its standalonefinancial statements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

(iv) The Company has provided requisite disclosures in the standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016. Based on our audit procedures and relyingon the Management representation we report that the disclosures are in accordance with thebooks of accounts maintained by the Company and as produced to us by the Management- Refernote 3.18 to the standalone financial statements.

9. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued bythe Central Government of India in terms of Section 143(11) of the Act we give in theAnnexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

For M.S. Krishnaswami & Rajan
Chartered Accountants
Firm registration No.01554S
Salem R. Krishnen - Partner
May 6 2017 Membership No.201133

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 8(f) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

1. We have audited the internal financial controls over financial reporting ofKandagiri Spinning Mills Limited (the Company) as of March 31 2017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the Guidance Note) issued by the Institute of Chartered Accountants of India and theStandards on Auditing prescribed under Section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of standalone financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2017 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For M.S. Krishnaswami & Rajan
Chartered Accountants
Firm registration No.01554S
Salem R. Krishnen - Partner
May 6 2017 Membership No.201133

"ANNEXURE B" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 9 under 'Report on Other Legal & Regulatory Requirement'section of our report of even date to the standalone financial statements of of KandagiriSpinning Mills Limited ("the Company") for the year ended March 31 2017)

In respect of fixed assets:

1. (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of the fixed assets.

(b) The fixed assets have been physically verified by the Management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of the fixed assets has been physicallyverified by the management during the year and no material discrepancies have been noticedon such verification.

(c.) The title deeds of immovable properties of the Company are held in the name of theCompany.

2. Inventories have been physically verified during the year by the management atreasonable intervals and no material discrepancies were noticed on such physicalverification.

3. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the Register maintained undersection 189 of the Companies Act 2013 and accordingly the provisions of clause (iii) ofparagraph 3 of the Order are not applicable to the Company.

4. According to the information and explanations given to us the Company has compliedwith the provisions of section 185 and 186 of the Companies Act 2013 in respect of loansinvestments guarantees and security.

5. According to the information and explanations given to us the Company has notaccepted any deposits from public and in respect of the deposits accepted fromshareholders the Company has complied with the directives issued by the Reserve Bank ofIndia and the provisions of sections 73 to 76 or any other relevant provisions of theCompanies Act 2013 and the Companies (Acceptance of Deposit) Rules 2014.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records under section148 of the Companies Act 2013 and are of the opinion that prima facie the prescribedaccount and records have been made and maintained.

7. (a) According to the information and explanations given to us and on the basis ofour examination of the books of account records the Company has been generally regularin depositing undisputed statutory dues including provident fund employees' stateinsurance income tax sales tax wealth tax service tax customs duty excise dutyvalue added tax cess and other material statutory dues applicable to it with theappropriate authorities during the year. According to the information and explanationsgiven to us no undisputed amounts payable in respect of the above were in arrears as atMarch 31 2017 for a period of more than six months from the date on when they becamepayable.

(b) According to the information and explanations given to us there are no dues ofIncome tax Wealth tax Excise duty Service tax and Customs duty which have not beendeposited on account of any dispute with the relevant authorities. Details of dues towardssales tax and value added tax that have not been deposited as at March 31 2017 on accountof disputes are stated below: (Nature of dues dues period to which the amount relatesforum where dispute is pending) Sales tax Rs.35909 Financial year 2000-01 Sales taxAppellate Tribunal.

8. In our opinion and according to the information and explanations given to us theCompany has defaulted in the repayment of dues to banks. The period and amount of defaultis as follows:

Principal

Principal
Bank Due Amount Due Date Paid Amount Paid on
State Bank of India
WC Term Loan-7.80 Cr.
June 16 2900000 30-June-16 2900000 20-Jul-16
July 16 2900000 31-Jul-16 2900000 11-Aug-16
Aug 16 2900000 31-Aug-16 1000000 31-Oct-16
1900000 5-Nov-16
Sep 16 2900000 30-Sep-16 2900000 5-Nov-16
Oct 16 2900000 31-Oct-16 2630000 14-Nov-16
270000 18-Nov-16
Nov 16 2900000 30-Nov-16 2900000 14-Dec-16
Dec 16 2900000 31-Dec-16 2900000 6-Jan-17
Corporate Loan - 10 Cr.
Oct 16 1000000 31-Oct-16 1000000 14-Nov-16
Nov 16 1000000 30-Nov-16 1000000 14-Dec-16
Dec 16 1000000 31-Dec-16 1000000 6-Jan-17

Principal

Principal
Bank Due Amount Due Date Paid Amount Paid on
Karnataka Bank Ltd.
Wc Term Loan - 7.80 Cr.
April 16 2900000 18-Apr-16 2900000 16-Jun-16
May 16 2900000 18-May-16 2900000 15-Jul-16
June 16 2900000 18-Jun-16 2900000 16-Aug-16
July 16 2900000 18-Jul-16 1500000 15-Sep-16
Aug 16 2900000 18-Aug-16 2900000 12-Nov-16
Sep 16 2900000 18-Sep-16 2900000 15-Dec-16
Oct 16 2900000 18-Oct-16 2900000 20-Dec-16
Nov 16 2900000 18-Nov-16 2900000 30-Jan-17
Dec 16 2900000 18-Dec-16 2900000 30-Jan-17
Jan 17 2900000 18-Jan-17 2900000 30-Jan-17
DPN Loan - 20.00 Cr.
April 16 6000000 28-Apr-16 6000000 24-Jun-16
May 16 6000000 28-May-16 6000000 25-Jul-16
June 16 6000000 28-Jun-16 6000000 26-Aug-16
July 16 7000000 28-Jul-16 1500000 27-Sep-16
1200000 15-Oct-16
4300000 21-Oct-16
Aug 16 7000000 28-Aug-16 7000000 24-Nov-16
Sep 16 7000000 28-Sep-16 7000000 20-Dec-16
Oct 16 7000000 28-Oct-16 2056907 20-Dec-16
1700000 26-Dec-16
3243093 23-Jan-17
Nov 16 7000000 28-Nov-16 7000000 30-Jan-17
Dec 16 7000000 28-Dec-16 7000000 30-Jan-17
Jan 17 7000000 28-Jan-17 7000000 30-Jan-17
Axis Bank
April 16 500000 30-Apr-16 9936 30-Apr-16
490064 2-May-16
June 16 500000 30-Jun-16 500000 1-Jul-16
July 16 500000 31-Jul-16 500000 2-Aug-16
Sep 16 500000 30-Sep-16 104526 30-Sep-16
100000 4-Oct-16
200000 4-Oct-16
95474 6-Oct-16
Oct 16 500000 31-Oct-16 100000 31-Oct-16
400000 1-Nov-16
Nov 16 500000 30-Nov-16 500000 2-Dec-16
Dec 16 500000 31-Dec-16 500000 2-Jan-17

Interest

Interest
Bank Due Amount Due Date Paid Amount Paid on
State Bank of India
WC Term Loan-7.80 Cr.
April 16 651439 30-Apr-16 651439 5-May-16
May 16 648815 31-May-16 648815 24-Jun-16
June 16 601760 30-Jun-16 601760 20-Jul-16
July 16 606294 31-Jul-16 606294 11-Aug-16
Aug 16 563021 31-Aug-16 563021 28-Oct-16
Sep 16 538603 30-Sep-16 538603 5-Nov-16
Oct 16 561491 31-Oct-16 561491 5-Nov-16
Nov 16 459177 30-Nov-16 459177 22-Dec-16
Dec 16 435270 31-Dec-16 435270 9-Jan-17
Jan 17 432345 31-Jan-17 432345 4-Feb-17
Feb 17 243386 28-Feb-17 243386 28-Mar-17
Mar 17 176150 31-Mar-17 176150 17-Apr-17
Corporate Loan - 10 Cr.
April 16 1098931 30-Apr-16 1098931 5-May-16
May 16 1135041 31-May-16 1135041 30-Jun-16
June 16 1109300 30-Jun-16 1109300 20-Jul-16
July 16 1141139 31-Jul-16 1141139 11-Aug-16
Aug 16 1138009 31-Aug-16 1138009 28-Oct-16
Sep 16 1109747 30-Sep-16 1109747 5-Nov-16
Oct 16 1157657 31-Oct-16 1157657 23-Nov-16
Nov 16 1101555 30-Nov-16 1101555 22-Dec-16
Dec 16 1123874 31-Dec-16 1123874 9-Jan-17
Jan 17 1128119 31-Jan-17 1128119 4-Feb-17
Feb 17 1066429 28-Feb-17 1066429 28-Mar-17
Mar 17 1140178 31-Mar-17 1140178 17-Apr-17
Karnataka Bank Ltd.
Wc Term Loan - 7.80 Cr.
April 16 688801 30-Apr-16 688801 24-Jun-16
May 16 707442 31-May-16 707442 28-Jul-16
June 16 667069 30-Jun-16 667069 30-Aug-16
July 16 655534 31-Jul-16 655534 25-Oct-16
Aug 16 624140 31-Aug-16 624140 11-Nov-16
Sep 16 572289 30-Sep-16 572289 20-Dec-16
Oct 16 585383 31-Oct-16 585383 23-Jan-17
Nov 16 544421 30-Nov-16 544421 31-Jan-17
Dec 16 519574 31-Dec-16 519574 31-Jan-17
DPN Loan - 20.00 Cr.
April 16 1248602 30-Apr-16 1248602 29-Jun-16
May 16 1216589 31-May-16 1216589 1-Aug-16
June 16 1110390 30-Jun-16 1110390 30-Aug-16
July 16 1081028 31-Jul-16 1081028 25-Aug-16

Interest

Interest
Bank Due Amount Due Date Paid Amount Paid on
Aug 16 1015866 31-Aug-16 1015866 24-Nov-16
Sep 16 932234 30-Sep-16 932234 20-Dec-16
Oct 16 943093 31-Oct-16 943093 20-Dec-16
Nov 16 861118 30-Nov-16 319907 23-Jan-17
541211 31-Jan-17
Dec 16 772780 31-Dec-16 772780 31-Jan-17
Jan 17 650658 31-Jan-17 650658 12-Apr-17
Feb 17 271525 28-Feb-17 271525 12-Apr-17
Mar 17 201292 31-Mar-17 201292 12-Apr-17
Corporate Loan - 10 Cr.
April 16 570721 30-Apr-16 570721 29-Jun-16
May 16 590090 31-May-16 590090 28-July-16
June 16 571289 30-Jun-16 571289 30-Aug-16
July 16 590340 31-Jul-16 590340 25-Oct-16
Aug 16 590961 31-Aug-16 590961 28-Nov-16
Sep 16 572758 30-Sep-16 572758 28-Nov-16
Oct 16 598759 31-Oct-16 484133 28-Nov-16
114626 20-Dec-16
Nov 16 579086 30-Nov-16 579086 20-Dec-16
Dec 16 579969 31-Dec-16 579969 31-Jan-17
Jan 17 581319 31-Jan-17 581319 13-Mar-17
Feb 17 508383 28-Feb-17 8383 13-Mar-17
500000 12-Apr-17
Mar 17 566622 31-Mar-17 566622 12-Apr-17
Axis Bank Ltd
April 16 99956 30-Apr-16 99956 2-May-16
May 16 97163 31-May-16 97163 2-Jun-16
June 16 88426 30-Jun-16 34180 30-Jun-16
54246 4-Jul-16
July 16 85572 31-Jul-16 85572 2-Jul-16
Aug 16 79424 31-Aug-16 79424 7-Sep-16
Sep 16 71298 30-Sep-16 71298 6-Oct-16
Oct 16 68764 31-Oct-16 68764 1-Nov-16
Nov 16 60345 30-Nov-16 13072 30-Nov-16
47273 2-Dec-16
Jan 17 37735 31-Jan-17 37735 28-Feb-17
Feb 17 12614 28-Feb-17 12614 28-Apr-17
Mar 17 13924 31-Mar-17 13924 28-Apr-17

According to the information and explanations given to us the company has not borrowedany moneys from a financial institution government or in the form of debentures.

9. Based upon the audit procedures performed and the information and explanations givenby the management the term loans were applied for the purposes for which the loans weretaken. The Company has not raised any money by way of initial public offer or furtherpublic offers including debt instruments. Hence reporting on utilization of such moneydoes not arise.

10. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company and no fraud of materialsignificance on the Company by its officer's or employee's has been noticed or reportedduring the year.

11. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

12. In our opinion the Company is not a Nidhi Company and accordingly the provisionsof Clause 3 (xii) of the Order are not applicable to the Company.

13. In our opinion and according to the information and explanations given to us alltransactions with the related parties are in compliance with section 177 and 188 of theCompanies Act 2013. The details of the transactions during the year have been disclosedin the standalone financial statements as required by the Accounting Standards. (Refernote 3.8 to the standalone financial statements).

14. Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.

15. Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered into any non - cash transactions withdirectors or persons connected with them. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.

16. In our opinion the Company is not required to be registered under section 45- IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.

For M.S. Krishnaswami & Rajan
Chartered Accountants
Firm registration No.01554S
Salem R. Krishnen - Partner
May 6 2017 Membership No.201133